El Paso City Council approves fee increase for water utilities, $826.2 million budget

RUBEN R RAMIREZÑEL PASO TIMES City council members Ann Morgan Lily, Courtney Niland, larry Romero, Emma Acosta and Carl Robinson listen as City Manager Tomas Gonzalez explains what steps were taken to balance the budget in the short time that he has been in his new position.

The City Council on Tuesday approved increasing water bills for nonresidential customers as a way to close a $3.5 million revenue gap in the $826.2 million 2015 budget adopted during the same meeting.

The new budget also will mean an increase in property taxes.

The council voted 6-2 to create a franchise fee for the El Paso Water Utilities — a cost that will likely then be passed down to industries, businesses, schools and other users. City Reps. Carl Robinson and Lily Limón voted against the fee.

The water utilities franchise fee for nonresidential customers, including churches and schools, was created and set at $16.10 a month, which the city staff estimates will generate the $3.5 million.

"They were really struggling to try to get what everyone wants and that's hard to do," said City Manager Tomas "Tommy" Gonzalez. "In this case I don't think everyone is happy, but I don't think everyone is angry."

The franchise fee will be given to the Public Service Board, which oversees El Paso Water Utilities, for implementation.

The council also approved the budget for the 2015 fiscal year, which begins Sept. 1. Last year's budget was $801 million. The increase to the budget includes funding for roadway repairs, restoring community services to parks and libraries, improvements for the police and fire departments, and increasing the speed of the permit granting process.

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A tax rate of 69.9 cents per $100 of property valuation also was approved.

The average-valued home, which is about $130,000, would have a city tax bill of about $869 — about a $26 increase from the previous year.

The city accounts for about a quarter of property tax bills. School districts, the county, hospital district and El Paso Community College account for most of the remainder of the bill.

The council had other options to come up with the $3.5 million, including making cuts to the proposed budget, creating the water franchise fee or increasing the existing franchise fee for El Paso Electric.

The suggestion to put the fee on nonresidents was made by city Rep. Dr. Michiel Noe, but city Rep. Cortney Niland made the motion.

"We've got to quit carting out the homeowners as the only source of revenue for the city," Noe said during the meeting.

Noe said he wanted to protect homeowners from higher taxes and rates but understood that those same residents wanted the services that the $3.5 million will help fund.

"If they only want cuts, then they are going to get them," Noe said. "My constituents came to me and said, 'I do want the services,' so I wanted to find a way to get them."

The council had explored making cuts that would have meant reducing services and not filling new positions and vacancies.

At one point, a motion to make the cuts was voted down 5-4. Mayor Oscar Leeser broke the tie after city Reps. Larry Romero, Emma Acosta, Robinson and Limón voted in favor of the cuts.

Acosta said she voted in support of the measure that eventually passed because it avoided putting a fee on residents.

"I did not want to increase the fee for residents," Acosta said. "With her (Niland) saying it would be on nonresidential users, it seemed much more palatable."

The water fee is something that the council was opposed to in November 2013 because it was unfriendly to businesses. Niland said Tuesday's action was something that did not hurt businesses too much.

Included in the budget are three additional inspectors for the city development department, which businesses had requested, Niland said.

"We were going to implement a franchise fee on El Paso Electric and that would have harmed some of the businesses," Niland said. "We just want to make sure that everyone who uses the infrastructure is putting in their share."

The electric company fee, which would have also been passed down to customers, was taken off the table after much discussion about how it would impact users and if it would go into effect in time to raise the needed money.

Several other fees will be increased as well, including the solid waste fee for trash pickup, park fees for league and tournament registration, and admission for the El Paso Zoo.

Niland said it was easy to keep the zoo and park fees because residents who use them have said they are willing to pay for those services.

"Throughout this process, people have been saying they want us to improve the parks and improve the police response time. Unfortunately, this takes money," Niland said. "I am sure we made the right decision today."

Many of the services that were going to be cut because of the $3.5 million shortfall when the budget was presented by Gonzalez were all added by council during workshops. They included land management and facility maintenance, vehicle replacement and additional positions.

Gonzalez said during the meeting that he will begin working on next year's budget to avoid difficulties.

"My goal is that by June 30, we have a final budget we can put into motion," Gonzalez said.

Next year, Gonzalez said he hopes the council is given options early on so they are not making a decision just days before the deadline.

"I don't think the council's role is to do the budget, it is to give us the vision," Gonzalez said. "It allows us to give them different options to choose from."

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